This PhD thesis addresses one of the most intensely debated phenomena over the past decade within
the realm of international business: Firms’ relocation of value chain activities to other parts in the
network of multinational corporation (MNC) or to external suppliers/services providers in foreign
countries (hereinafter referred to as offshoring), often to destination countries with lower cost
structures. Whereas the offshoring of manufacturing tasks has existed for several decades, and has
been analyzed in the international business literature, the offshoring of advanced services tasks from
developed country firms to destination countries such as India, which offer an attractive cocktail of
low costs and highly skilled labour, is a more recent phenomenon. The offshoring of this type of
services tasks forms the subject of this PhD thesis...

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In this article, we explore the idea that offshoring of services and technical work should be regarded as a dynamic process that evolves over time. Firms gradually move from offshoring of simple, standardized activities towards offshoring of advanced activities when they accumulate experience with offshoring, and this type of offshoring comes with an entirely different set of characteristics compared to traditional, cost-seeking offshoring. Based on a unique survey among the total population of firms in the eastern region of Denmark, we analyze some of the dynamics of this process through a model that incorporates two different aspects of the process of offshoring. First, we approach the question of whether to offshore and establish a baseline that investigates the determinants of firms’ participation—or lack thereof—in offshoring. Secondly, we approach the question of what to offshore and the subsequent process of offshoring, as we analyze the determinants of the offshoring of advanced, highend technical, and service activities. The findings are consistent with the notion of offshoring as a dynamic process as they show how some (cost-related) determinants play a role when firms first engage in offshoring, while rather different determinants matter for the subsequent process of offshoring of advanced activities. Although the model portrays a simplified expression of the offshoring process with two stages, the findings underpin our view that a process perspective on offshoring is a useful analytical framework.
Keywords: Offshoring dynamics, and service offshoring